**Executive summary**
This proposal seeks approval from the Council for a set of measures aiming to enhance xOrca liquidity and make Orca staking more attractive for both shorter-term holders and long-term holders, improving investor confidence and convenience.
Context and current situation
Currently, there is over 3.85 million xOrca minted, which equals 5.7 million Orca tokens staked. The holder interest to staking has helped to absorb part of selling pressure during the Q1 2026. At it’s peak, there were over 6.2 million xOrca in circulation (equal to 9+ million Orca tokens, or 15% of circulating supply / 12% of total supply, staked).
During April and early May, the price of Orca has gone from just under 1$ to over 2.2$ at local maximum, triggering over 2.4 millions of xOrca being burned and around 3.5 million of Orca unstaked and sold, diminishing the recent price action.
This also has been characterized by xOrca/Orca exchange rate dipping temporarily below 1, when the unstaking rate was at 1.477, implying huge instant selling pressure for xOrca with discounts reaching 30%.
Additionally, despite the fact that xOrca token has been advertized as a fully-functional LST token that can be utilized further in the DeFi ecosystem, there is currently lack of options to do so, therefore, leaving only to options for holders: either unstake in 1 week or sell instantly at potentially huge discount
Measures proposed to enhance the xOrca utility and liquidity
1. Set up a Kamino lending/borrowing markets, enabling both Orca and xOrca holders to supply Orca and xOrca and borrow against them in SOL or USDC. Add some initial protocol-owned liqudity to this market.
As a result, there will appear a ne way to utilize a token:
Suppliers will earn additional APY on their Orca / xOrca tokens while removing them from the market, hile being able to borrow against their assets at a relatively low rate, borrowers will be able to borrow Orca to sell it for xOrca on the open market (or vice versa if there is a premium to xOrca/Orca unstaking rate), reducing the xOrca/Orca depeg and enhancing its tradability.
2. Set up a fast-track unstake option for xOrca. Currently there’s only one option to unstake, and a cooldon period is set to 1 week. Another, fast-track, option should be added, with reduced cooldon period (24h instead of 1 week) and a fee/tax paid by unstaker (1-2% or any other that is sufficient to discourage pure speculation). This tax should be collected in Orca and could be used in many ways:
- be collected into Council Orca vault, therefore being removed from the market and being able to be directed into further protocol development ,
- be redirected into Orca/xOrca pool to improve the xOrca/Orca liquidity, reducing price impact on trades,
- be burned, effectively reducing the total supply of a token,
- be redirected into Kamino lending market,
or in any combiation of the above based on the Council’s decisions.
3. Improving Orca/xOrca liquidity pool: part of ~15 millions Orca tokens currently in vaults should be deployed into Orca/xOrca liquidity. This could follow rule-based automated logic: for each xOrca minted, given the xOrca/Orca redemption rate of K, corresponding X Orca tokens of value should be added to the xOrca/Orca pool, where X = K * r, and r <= 1 is the liquidity matching ratio. The pool could also have and absolute maximum cap of 5% of Orca supply. The rebalancing of LP position could be automated and conducted each hour/day to provide sufficient liquidity depth for existing xOrca holders. The fee tier of a pool could be increased to 0.05% or 0.16% to enhance yield for LP position.
Results
All these measures will enhance xOrca liquidity, while creating new value streams for long-term holders and making staking more responsive to immediate market action, increasing staker’s convenience, and, as a result, reducing Orca’s volatility, preventing pump-and-dump scenarios that we have been observing during the last month.